Pension Income Drawdown

Also called Pension Fund Withdrawal

How does it work and what does it offer?

Pension Income Drawdown allows you to take a currently, tax free lump sum out of your pension (up to 25%) without having to purchase an annuity or having to take an income from your plan.

Essentially you can stay fully invested with the ability to take an income from the plan ranging from £0 – whatever the annuity amount would be available under the GAD rules. (Government Actuary Department).

You may start drawing an income from your pension fund from day one of entering into the Pension fund withdrawal contract whilst the fund remains invested. This income will be subject to your usual income tax ratio

During the running of the Pension Fund withdrawal, in the event of the policyholder’s death, the full fund is available to be used for the following options:

  • Payout a lump sum death benefits to your spouse/partner and or dependents (subject to a 35% tax charge.
  • Allow a spouse/partner or dependent to continue in drawdown until they reach age 75 when an annuity can then be purchased for them.
  • Purchase an annuity immediately for the surviving spouse/partner.

You can make use of the Pension drawdown plan until you are 75. The level of income that can be taken is reviewed every 5 years by your pension provider in line with the GAD rules.

When you reach age 75 you will have to either purchase an annuity with the remaining pension fund or enter into an Alternatively Secured Pension (ASP). ASP's are particularly complex and should only be discussed with and arranged by a specialist pension adviser.

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Main advantages of Pension fund withdrawal

  • Ability to access tax free cash of up to 25% of your fund without having to purchase an annuity.
  • Flexibility and control of your pension income until age 75.
  • Ability to remain fully invested.
  • Death benefits for surviving spouse/partner or dependents.

Main Disadvantages of Pension fund withdrawal

·          Annuity rates may be less that at present when you buy an annuity.

·          The value of some investments can fall as well as rise.

·          Taking an income from your pension plan early may reduce the benefits that you receive at a later date.

The FSA strongly recommend that when considering pension fund withdrawal or alternatively secured pensions you should take Independent Financial Advice as these are complex financial products.

Why Lifeassureonline?

Our specialist and qualified pension advisers have many years experience available to you either by email or by phone. We offer an initial, no obligation and impartial discussion, with a full advisory service available to ensure you make the correct choice for you given circumstances at the time. At Lifeassureonline we have strict policy of NOT selling your data to third parties.

How much does the advice cost?
We offer our clients a choice of either paying us a fee by arrangement for our services or we can receive commissions from the product providers when we place the business with them We will discuss these options with you at the outset, but first and foremost we will have a no obligation, no charge discussion with you to see if this is the most suitable plan for your circumstances. You will be given full information on all the options available to you, so you can make a fully informed choice, helping you ensure you make the right decision for your own personal situation.

What to do next:-
To enquire whether Pension Fund Withdrawal is suitable for you simply phone us now free of charge on - 0800 458 3525 or email enquiries@lynfs.co.uk

OR

Get started with our Enquiry Form by clicking here

Once you have completed the form, we will contact you first to assess your requirements and talk you through the options. Providing you are then happy to proceed, we will agree how we are to be paid for our services, and forward a short form for completion and return either on line or by post if preferred. We will assist you all the way through the process of your application until your plan has been completed. We will also be available for ongoing advice, subject to agreement, for ongoing advice on your plans.

 

Important information for your protection

We will always give impartial Independent Financial Advice, to suit your personal circumstances. This will require your providing us some personal financial data so that when we give you the advice it is based on your specific requirements.

 

Your personal and pension details will be treated and held on a totally confidential basis and will not be passed to any third party, with the exception of the pension company with whom your plan is placed.

 

Even when your case has completed you will have 30 days to change your mind.